In shares seeing activity before the official start of trading, Gateway
gtw
fell 7 1/4 from its NYSE close to 55 in Instinet trading. See Indications. After the close Wednesday, Gateway said it expects a lower-than-expected fourth-quarter profit of 37 cents a share, 7 cents shy of analysts' expectations. Gateway blamed the shortfall on a lack of chips and motherboards, particularly for its low-end PCs. But the company backed analysts' expectations of $1.83 per share in profit for the current year. See related story.

Among the big movers, Cobalt
cblt
jumped 6 1/2, or 157 percent, to 27 over the Island ECN. Late Wednesday, the company announced it will launch Motorplace.com, a Web site that will aggregate vehicle and parts data from Cobalt's more than 12,000 auto dealer clients to create a dealer-to-dealer e-commerce marketplace.

Beyond.com
bynd
shares dropped 1 5/32, or 15 percent, to 6 3/8 over Island. After the close of trading Wednesday, the company said its fourth-quarter revenue is expected to be short of expectations at $34 million to $35 million due to sluggish consumer sales. Still, the company said it expects to incur a loss of 65 to 68 cents per share while First Call was estimating a loss of 76 cents a share.

Shares of PeopleSoft
PSFT, +15.79%
gained 7/16 to 18 1/2 in Instinet. The software maker said it sees fourth-quarter earnings of 2 to 4 cents a share compared to the First Call estimate of 2 cents a share.

Tiffany & Co.
TIF, -0.05%
may see gains at the open after announcing that fourth-quarter profits will blow nearly 23 percent past Wall Street estimates. The company expects to earn at least $1.08 a share, up from the 88-cent First Call estimate. See full story.

In the bond market, prices rose with the 30-year Treasury up 18/32 to yield
TYX, +2.24%
6.58 percent.

In economic news, weekly initials claims rose by a larger-than-expected 33,000 to 309,000. This series has a tendency to fluctuate during the holiday season.

Still ahead is the unveiling of November new home sales, expected to come in at 929,000. View and .

In currency markets, the dollar maintained its bid against the yen but faltered against the euro. Dollar/yen was recently changing hands at 104.61, up 0.4 percent from the previous close, while euro/dollar added 0.7 percent to 1.0388. See international indices and view currency rates.

Wednesday's trading session

The Nasdaq closed in the minus column Wednesday but ended well off session lows in a day characterized by extremely volatile dealings. Blue-chip issues, on the other hand, flexed their muscles after two straight sessions of steep losses.

Joe Liro, equity strategist at Stone & McCarthy Research Associates, said many investors were rotating from tech shares into more defensive areas of the market, which explained the Dow's outperformance Wednesday.

Internet, computer software, semiconductor and networking issues came under the heaviest selling pressure Wednesday. Leading on the upside were defensive sectors such as the utilities, pharmaceuticals and gold stocks. Also higher were bank shares, which had taken a beating in previous sessions.

Liro said he wouldn't be surprised to see another wave of profit-taking on Friday if the December employment report reveals stronger-than-expected growth. But he believes buyers will emerge on dips since that strategy has worked so well recently.

The Dow Jones Industrial Average
DJIA, +0.72%
jumped 124.72 points, or 1.1 percent, to 11,122.65. Leading on the upside were shares of Alcoa, up 5 1/16 to 86, Boeing, up 2 1/2 to 42 5/8, ExxonMobil, up 4 3/16 to 81, and Home Depot, up 2 15/16 to 61 7/16.

The Nasdaq Composite
$compq
shed 24.15 points, or 0.6 percent, to 3,877.54. The tech gauge, off 167 points at its session lows, erased losses as some of its big-name components -- such as Microsoft and Intel -- clawed their way into the plus column. (See 2-month chart of Dow and Nasdaq.)

Volume came in at 1.07 billion on the NYSE and at a whopping 1.73 billion on the Nasdaq Stock Market. It was the Nasdaq's second heaviest trading day after December 9, 1999, when 1.77 billion shares changed hands. Market breadth was positive. There were 18 advancing issues compared to 14 declining ones on the Big Board and 22 winners vs. 19 losers on the Nasdaq.

Liro believes the market may have already seen its worst shake-out for the near-term in Tuesday's sell-off and believes the investment flows that typically make their way into the market in January will counter any profit-taking.

Goldman's not surprised to see profit-taking in technology issues either. "You have to remember that the Nasdaq was up 22 percent in December."

Shares of software companies were hard hit Wednesday on the heels of an earnings warning from BMC Software
BMCS, -12.50%
The company sees a lower-than-expected fiscal third-quarter profit of 40 to 44 cents a share compared to the First Call estimate of 53 cents a share. Merrill Lynch downgraded the stock to a "near-term neutral," long-term accumulate," from a "near-term and long-term buy." BMC shares plunged 27 7/16, or 35.6 percent, to 49 9/16. Oracle
ORCL, +0.42%
dropped 5 11/16 to 102. Also weighing on the sector: Goldman Sachs cut its fourth quarter 1999 forecast on SAP AG
SAP, +0.23%
Europe's biggest software maker, by 40 percent.

E-tailers lost ground, led by Amazon
AMZN, +0.17%
which dropped 12 3/16, or 14.9 percent, to 69 3/4. The company's chief financial officer said strong fourth-quarter sales won't help the online retailer's bottom line. Fourth quarter sales climbed to $650 million, more than two-and-a-half times the total seen in the same period of 1998. See full story.

Priceline.com
PCLN, +0.60%
which rose 5 15/16 to 59 15/16, said it expects its operating loss in the fourth quarter to be narrower than the third-quarter loss. First Call estimates Priceline's loss for the quarter to come in at 8 cents per share.

Brokerage stocks slipped after a dismal showing on Tuesday as well. J.P. Morgan downgraded Goldman Sachs
GS, +0.17%
to a "market perform" from "long-term buy" and downgraded Morgan Stanley Dean Witter to a "long-term buy" from a "buy." Goldman shares lost 3 7/8 to 78 7/8 while Morgan Stanley fell 5 to 120. See story.

Shares of IBM
IBM, +0.70%
rose 3 15/16 to 116. Banc of America Securities upgraded the stock to a "strong buy" from a "buy" rating on increasing confidence in its near-term outlook. A price target of $150 was maintained.

And Apple Computer
AAPL, +1.63%
rose 1 1/2 to 104. Apple and EarthLink
ELNK, -1.21%
announced a deal to make EarthLink -- soon to merge with MindSpring
MS.PG, -0.19%
-- the exclusive ISP in Apple's new-computer set-up software. Meanwhile, Steve Jobs spoke at the Macworld Expo in San Francisco and announced he was dropping 'interim' from his CEO title to take the job full-time. See full story. Earthlink shares rose 2 13/16 to 44 11/16.

The fixed-income market's focus remains on next month's Fed meeting and, in the short-term, Friday's employment report for December, which will be key in determining the direction of interest rates over the next couple of weeks.

Wednesday saw the unleashing of November factory orders, which rose 1.2 percent compared to expectations for a 1.0 percent increase. See full story.

GTE Corp.
GTE, +0.00%
gained 3 3/8 to 68 7/8 while Bell Atlantic
BEL, +0.00%
was up 1 15/16 to 59 15/16. Bell Atlantic may spin off GTE's Internet-backbone assets for a total of $2.5 billion in order to secure approval from the Federal Communications Commission of its acquisition of GTE Corp.

CS First Boston initiated coverage of the following telecom companies with a "strong buy" rating on Wednesday: AT&T, Bell Atlantic, GTE, MCI WorldCom, Sprint, Qwest and US West.

Shares of Net2Phone
ntop
added 3 7/8 to 54 15/16. The company is teaming up with Panasonic Consumer Electronics to offer telephones that will allow connection to Internet phone networks. See story.

DuPont
DD, +0.23%
shares put on 2 15/16 to 67 15/16. Deutsche Banc Alex. Brown upgraded the company to a "buy" rating from "market perform" and set a $78 price target.

Salon.com
SALN, +0.00%
surged 2 3/4, or 53 percent, to 7 15/16 after the company announced that news and commentary from one of its Web sites will be featured on Red Hat's recently launched news site. See Screamers.

Separately, Red Hat said it's buying privately-held Hell's Kitchen Systems, a payment processing software company, in an all-stock transaction for up to $89.6 million. See full story.

Safety Kleen
SK, +0.36%
tumbled 3 1/16 to 7 11/16 after the company posted lower-than-expected earnings of 25 cents a share compared to the First Call estimate of 30 cents a share.

In currency markets, the dollar remained well bid against the yen but edged lower against the euro. Fears of additional intervention from the Bank of Japan like the one witnessed on Monday -- with many Japanese officials continuing to "talk up" the dollar -- is likely to cap dollar declines in the near term.

Dollar/yen was recently changing hands at 104.29, up 1.0 percent from the previous close, while euro/dollar added 0.2 percent to 1.03160.

Intraday Data provided by SIX Financial Information and subject to terms of use.
Historical and current end-of-day data provided by SIX Financial Information. Intraday data
delayed per exchange requirements. S&P/Dow Jones Indices (SM) from Dow Jones & Company, Inc.
All quotes are in local exchange time. Real time last sale data provided by NASDAQ. More
information on NASDAQ traded symbols and their current financial status. Intraday
data delayed 15 minutes for Nasdaq, and 20 minutes for other exchanges. S&P/Dow Jones Indices (SM)
from Dow Jones & Company, Inc. SEHK intraday data is provided by SIX Financial Information and is
at least 60-minutes delayed. All quotes are in local exchange time.